$WMT bulls ring up quick profits in hours

Option traders are making quick profits today on upside positions opened in Walmart (WMT).

Just over an hour into today’s session, Market Rebellion’s proprietary Unusual Activiy programs found that 2,500 July $119 calls were bought for $1.25 to $1.75 with shares at $119.17. This was clearly fresh buying, as open interest in the strike was only 1,273 contracts before that session began.

Those calls traded for as much as $8.96 a few hours later, about 6 times their average purchase price. The stock rose 7.02% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

WMT was up 6.78% to close at $126.95 this afternoon. The retail giant announced today that it would be launching a $98 yearly service to compete against Amazon (AMZN) Prime later this month.